A key part of the mayor's effort to transform the city into the next Silicon Valley comes into focus this month when the battle to open New York's new "genius school" enters the home stretch.

Top universities from around the world are vying to win the chance to open a world-class applied sciences grad school on city land. The deadline for final proposals is Oct. 28; a winner could be picked by the end of the year.

"This is an Erie Canal moment," said Economic Development Corp. President Seth Pinsky, referring to the canal that opened a waterway to the Great Lakes and helped establish New York's economic preeminence. "We started the project for something game-changing ...an opportunity to change the city's economic direction for generations to come."

Bloomberg is offering a powerhouse academic institution free land and $100 million in construction costs to open the school.

It would mirror the ambitious project involving MIT in Massachusetts, which made the Cambridge-Boston area an innovation capital of the world - home to some 95 biotech firms and 47 energy companies.

And it's just one of several City Hall initiatives to bolster the high-tech sector, including $22 million to help launch startups.

There's an incubator program providing nine affordable spaces for news companies, summer tech boot camps for up-and-coming entrepreneurs and a contest designed to encourage techies to set up businesses in New York.

Stanford and Cornell say they'd spend at least $1 billion on a state-of-the-art campus for several thousand grad students. Instruction would focus on technology relevant to city industries like finance, real estate and media.

Stanford is the alma mater of Google creators Sergey Brin and Larry Page; Cornell says it has the best grasp of a "desperate need" to build the city's tech industry.

City Hall says a tech-focused grad school would create 30,000 jobs and $6 billion in total economic impact over 35 years.

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Officials hope it will become a hub of innovation that would lure Mark Zuckerbergs and entice them to launch companies here.

Just 4% of New York area workers are scientists and engineers, compared with 7% of workers in tech hotbeds around Boston and San Francisco.

"Everything is moving in New York's direction," Pinsky said. "The X-factor is still missing."

"The city needs to be doing a lot of things in order to improve ...and diversify its economic base, but this is one thing that makes sense," Parrott said.

Not everyone is thrilled. William Zajc, head of Columbia's physics department, questioned the wisdom of inviting proposals from schools outside the city: "I would have hoped the mayor's first approach would be to build on existing strengths here."

Columbia aspires to build a million-square-foot institute on its new Manhattanville campus.

NYU and its team of partners, including IBM and the University of Warwick in the U.K., propose a campus near Brooklyn's Metrotech area focused on what makes "the sustainable city of the future."

Bloomberg, for his part, sounded giddy over the competition at a recent IBM THINK Forum. "We expect some great proposals," he said. The new school will "change the landscape for New York City for the next 50-odd years because all of the new high-tech companies being started up in Palo Alto will be started right here."